Best Payroll Software for Small Businesses in the USA
1. Introduction: Why payroll software matters for small business
Running payroll is one of the most critical — and compliance-sensitive — tasks any small business faces. Payroll mistakes lead to unhappy employees, IRS/state penalties, and hours spent fixing filings. The right payroll software automates calculations, files payroll taxes, supports year-end forms, and often bundles essential HR tools like new-hire reporting, PTO tracking, and benefits administration.
Because small businesses vary (2–10 employees vs. 50+ employees), the best payroll system depends on your priorities: lowest cost, easiest setup, HR integrations, or full-service tax filing and support. This guide walks you through the market leaders and lays out a practical framework for choosing and implementing payroll software in the USA.
2. Top payroll providers at a glance (quick shortlist)
Here are the platforms that consistently appear on “best payroll” lists and that small businesses in the USA should consider:
- ADP (RUN) — enterprise heritage, strong compliance & payroll tax filing options.
- Gusto — small-business friendly, modern UX, benefits + payroll in one.
- QuickBooks Payroll (Intuit) — best if you already use QuickBooks accounting.
- Paychex Flex — strong payroll + HR combo for businesses that may scale.
- OnPay — clear pricing and solid payroll + basic HR for small businesses.
- Patriot Payroll — budget-friendly and highly rated in user reviews for small employers.
- Rippling — best for teams that want unified HR + IT + payroll (strong workflow automation).
- Square Payroll & Wave Payroll — attractive for small teams, contractors, or businesses already in those ecosystems.
The profiles below explain differences, price signaling, product strengths, and weaknesses so you can match features to your needs.
3. Deep dive: Providers, features, pricing & who they’re best for
Note: pricing and promotions change frequently; always confirm the vendor’s current pricing before purchasing.
ADP (RUN) — Best for compliance and growing businesses
Overview & strengths
ADP is one of the oldest payroll providers and a market leader for small to large businesses. Its RUN product targets small businesses with tiered packages that cover payroll processing, tax filing, multi-state payroll, and compliance support. ADP’s brand strength includes deep tax-filing expertise, 24/7 support options in some packages, and mature reporting.
Key features
- Automated payroll runs (scheduled or on-demand)
- Federal and state tax filing (automated)
- New-hire reporting and garnishment handling
- Employee self-service portal and mobile app
- Time & attendance integrations and optional HR add-ons
Pricing (signpost)
ADP often provides tiered plans and custom quotes; ADP markets entry-level small business plans starting at a per-month base plus per-employee fees. Always request a custom quote for accurate pricing.
Pros
- Robust compliance and tax-filing track record
- Scales from small to large employers
- Established support and resources
Cons
- Can be pricier than simpler competitors for tiny teams
- Some features are add-ons or available in higher tiers
Best for: Small businesses that expect to grow, need multi-state payroll, or want a recognized payroll partner with strong compliance support.
Gusto — Best for small businesses seeking modern UX + HR features
Overview & strengths
Gusto has built a reputation for a friendly, modern interface geared toward small and medium businesses. It bundles payroll, benefits administration (health, 401(k) integrations), and HR tools like onboarding and offer letters, making it a good all-in-one choice. Gusto emphasizes unlimited payroll runs and automated tax filings.
Key features
- Unlimited payroll runs and automatic tax filings
- Benefits administration (medical, dental, 401(k), commuter benefits)
- Employee onboarding, offer letters, and time tracking integrations
- Contractor management and multi-state capabilities
Pricing (signpost)
Gusto lists plans that include a base fee plus per-employee pricing. Examples and promotional structures vary; check Gusto’s pricing page for current tiers and contractor-only options.
Pros
- Intuitive setup and modern UI (low learning curve)
- Good benefits integration for small teams
- Transparent, predictable pricing tiers for many customers
Cons
- Add-ons (like premium HR tools) increase cost
- Slightly higher per-employee cost than bare-bones payroll services
Best for: Small businesses that want payroll plus HR features and benefits administration in a single, user-friendly platform.
QuickBooks Payroll (Intuit) — Best if you use QuickBooks accounting
Overview & strengths
QuickBooks Payroll integrates tightly with QuickBooks Online accounting, which makes it a natural choice if your bookkeeping already runs on Intuit’s platform. Intuit continues to evolve QuickBooks products and invest in automation and decision-support features.
Key features
- Payroll processing with tax filing and year-end forms
- Deep integration with QuickBooks Online for reconciliation
- Workers’ comp options and payroll agent assistance (depending on plan)
- Time tracking and HR add-ons
Pricing (signpost)
QuickBooks lists tiered payroll plans (Core, Premium, Elite) with a base monthly fee plus a per-employee fee; pricing has seen adjustments in recent years, so verify current rates.
Pros
- Seamless accounting integration with QuickBooks
- Strong automation and reconciliation features
- Familiar interface for QuickBooks users
Cons
- Price increases have been reported over time; check current rates
- Best value if you already use (or plan to use) QuickBooks accounting
Best for: Businesses already using QuickBooks or those who want tight accounting-payroll integration.
Paychex Flex — Strong payroll + HR for scaling small businesses
Overview & strengths
Paychex combines payroll processing with an HR platform that supports benefits, recruiting and administration. It’s widely used by small and medium businesses and offers scalable options as organizations grow. Paychex’s strength is flexibility and a mature HR ecosystem.
Key features
- Fast payroll runs with automated tax filing
- HR and benefits administration tools
- Mobile app and self-service for employees
- Optional PEO and benefits packages
Pricing (signpost)
Paychex tends to provide custom quotes or tiered options; contact sales for the most accurate small-business pricing and promotions.
Pros
- End-to-end payroll + HR capabilities
- Good for businesses planning to scale HR operations
- Strong customer support options
Cons
- Typically requires a sales consultation for precise pricing
- May be more than a tiny employer needs
Best for: Businesses that expect to scale HR functions and want payroll tightly integrated with HR systems.
OnPay — Clear, small-business friendly pricing
Overview & strengths
OnPay markets itself as a straightforward solution with clear pricing and strong support for small businesses, including multi-state payroll and benefits. It’s consistently named among top payroll software comparisons and is a great mid-point between cheaper DIY options and high-end providers.
Key features
- Unlimited payroll runs and tax filings
- Benefits admin and HR support templates
- Integrations with accounting and time-tracking tools
Pricing (signpost)
OnPay is known for transparent pricing and competitive per-employee fees — check OnPay’s site for current and exact rates.
Pros
- Simple pricing and strong customer support
- Good balance of value and features
- Easy onboarding for small teams
Cons
- Not as feature-rich as large enterprise HR suites
- Fewer advanced HR automation features than some competitors
Best for: Small businesses that want clear pricing, reliable payroll, and simple HR features without enterprise complexity.
Patriot Payroll — Best budget option with positive user reviews
Overview & strengths
Patriot Payroll positions itself as cost-effective payroll for small businesses. Based on user-review summaries, Patriot often ranks high in satisfaction among small employers for straightforward payroll processing. If budget is the main constraint, Patriot is worth evaluating.
Key features
- Basic payroll processing and tax filing (depending on plan)
- Simple user interface geared toward small employers
- Optional full-service payroll where the vendor files taxes
Pricing (signpost)
Patriot’s pricing is typically lower than major players, with a simple base fee + per-employee pricing. Verify the current tiers on Patriot’s official site.
Pros
- Very affordable for tiny payrolls
- High user-satisfaction ratings for core payroll
Cons
- Fewer advanced HR features and integrations than larger vendors
- Support and add-ons may be more limited
Best for: Very small businesses and startups that need a reliable, low-cost payroll solution.
Rippling — Best for unified HR + IT + payroll automation
Overview & strengths
Rippling stands out because it unifies payroll and HR with IT workflows — device provisioning, app provisioning, and workforce management — which is useful for startups and tech-savvy small businesses that want automation beyond payroll. Its pricing tends to be modular, adding functionality as needed.
Key features
- Payroll + HR + device/app provisioning & automation
- Global payroll options for distributed teams
- Powerful integrations and scripting-like automation
Pricing (signpost)
Rippling’s modular pricing can become costly with many modules; request a quote and pick modules that match immediate needs.
Pros
- Strong automation and modern platform design
- Great for businesses needing HR+IT tooling in one place
Cons
- Pricing can escalate with multiple modules
- Feature set may be overkill for micro-businesses
Best for: Tech-focused small businesses with hybrid or remote teams who want to automate HR and IT tasks alongside payroll.
Square Payroll & Wave Payroll — Good for contractors, micro-businesses
Overview & strengths
Square Payroll is attractive for restaurants and retail businesses already using Square POS. Wave Payroll (by Wave, which focuses on small-business accounting) is another low-cost option for small teams and contractors.
Key features
- Contractor-friendly payments and 1099 handling
- Simpler pricing and minimal overhead for tiny teams
- Integration with POS or accounting tools from the same vendor
Best for: Freelancers, micro-businesses (1–10 employees), or Square/Wave ecosystem users.
4. How to choose payroll software — a 10-point checklist
Use this checklist to match software to your priorities:
- Number of employees & contractors — some vendors have better pricing for contractor-only payroll.
- State(s) you operate in — multi-state payroll raises complexity and cost.
- Tax filing needs — do you want full-service payroll (vendor files taxes) or do you prefer to file yourself?
- Budget & pricing model — base fee + per-employee vs. all-in-one. Check renewal prices too.
- Integrations — accounting (QuickBooks, Xero), time tracking (TSheets, Homebase), HRIS.
- Benefits & HR — do you need benefits admin, 401(k), or onboarding tools?
- Ease of use & onboarding — how fast can you run your first payroll?
- Support & SLA — phone, chat, dedicated rep, hours of availability.
- Security & compliance — SOC2, data encryption, audit trails.
- Future roadmap & vendor stability — vendor investments or major partnerships may indicate product direction.
Prioritize three “must-haves” vs. three “nice-to-haves” before evaluating demos.
5. Integrations & workflows (accounting, HR, time tracking)
Payroll is rarely standalone. Common integrations to consider:
- Accounting: QuickBooks, Xero, FreshBooks — seamless posting reduces reconciliation time.
- Time tracking: TSheets, Homebase, Deputy — automatically sync hours to payroll.
- HR/Benefits: BambooHR, Zenefits, in-house HRIS — for onboarding and PTO policies.
- POS & Retail: Square, Clover — helpful for hourly retail/restaurant staff.
- Identity & IT (Rippling): device and app provisioning tied to onboarding/offboarding.
When evaluating a vendor, test the actual sync (not only that it exists). Ask how overtime calculations, tip reporting, and PTO sync are handled. Vendors that offer native integrations typically have more reliable data flows than third-party connectors.
6. Payroll compliance, taxes & recordkeeping (what you must know)
Payroll compliance in the USA includes federal tax withholding (income tax, Social Security, Medicare), federal & state unemployment taxes (FUTA/SUTA), and potential local taxes. Key points:
- Federal & state filings: Full-service payroll vendors will calculate and file federal/state payments and quarterly/annual returns on your behalf. If you choose a DIY model, you must confirm deposit schedules and file forms timely.
- New-hire reporting: Most states require employer reporting of new hires within a specific timeframe — vendors typically handle this.
- Garnishments & levies: Vendors can manage garnishment calculations and payments but may charge for administration.
- Records retention: Maintain payroll records per federal/state requirements (typically several years for tax records).
- Penalties: Late deposits or incorrect filings can trigger penalties — partnering with a reputable vendor reduces risk but doesn’t eliminate employer responsibility.
If you operate in multiple states, confirm that the provider supports all those states and understands local payroll rules (e.g., paid leave laws, state disability taxes).
7. Implementation plan: 30-60-90 day rollout for small teams
A phased rollout reduces errors. Example plan:
Day 0–30 (Plan & setup)
- Pick vendor and plan.
- Gather employee data (SSN, addresses, W-4, state forms) and contractor details.
- Connect accounting and time-tracking integrations.
- Configure pay schedules, pay rates, overtime rules, PTO policies.
Day 31–60 (Test & parallel runs)
- Run at least one parallel payroll (process without disbursing) to reconcile calculations.
- Test tax filings in sandbox (if vendor provides).
- Train your payroll admin and employees on self-service.
Day 61–90 (Go live & stabilize)
- Run first live payroll and confirm direct deposit or paychecks.
- Verify tax deposits and filings for the period.
- Collect feedback and adjust pay rules or integrations.
Documentation and a backup plan (e.g., manual payroll checks for one cycle) will reduce disruption during the switch.
8. Costs, savings & ROI — what to expect
Direct costs
- Base monthly fee + per-employee fees. Add-ons (year-end support, garnishment handling, benefits admin) increase cost. Pricing examples from recent years show entry packages with per-employee fees ranging from low single dollars (contractor-only) to higher per-employee rates depending on features and vendor.
Hidden/indirect costs
- Setup time, migration of historical payroll data, and staff time to reconcile initial runs.
Savings
- Time saved on payroll processing, fewer tax mistakes, and reduced accounting reconciliation time often justify the subscription. Many small businesses recoup costs within months via saved admin time and avoided penalties.
9. FAQs (quick answers to common payroll questions)
Q: Can I run payroll for contractors only?
A: Yes — many vendors offer contractor-only plans with no W-2 handling.
Q: What if I have multi-state employees?
A: Choose a vendor with multi-state support. Multi-state filings add complexity and may increase cost.
Q: Will my payroll vendor file taxes for me?
A: Many vendors provide “full-service payroll” where they calculate, deposit, and file payroll taxes. Verify the level of service and any guarantees for errors/penalties.
Q: How soon do payroll systems disburse direct deposits?
A: Many vendors offer next-day or 2–4 day direct deposits depending on plan and processing schedule. Check vendor SLA.
Q: Can I switch vendors mid-year?
A: Yes, but plan carefully: export YTD payroll data, ensure tax deposits and filings are settled, and coordinate cutover so employee tax records are accurate.
10. Final recommendations & next steps
If you want the simplest path (small team, benefits + HR): Consider platforms known for friendly UX and benefits integrations for their all-in-one approach.
If you prioritize compliance and enterprise-grade payroll: Evaluate established payroll providers with strong tax-filing experience and broader HR capabilities — request a small-business package and confirm pricing.
If you already use QuickBooks: QuickBooks Payroll is often the fastest win because of accounting integration—confirm recent price/feature changes before committing.
If you’re on a tight budget: Look into budget-friendly payroll options and contractor-friendly plans for lower-cost solutions.
